Conference report deletes all provisions of 4th edition and replaces it with AN ACT TO MODIFY THE MEDICAID TRANSFORMATION LEGISLATION. 

Amends SL 2015-245, Section 4, as amended by SL 2016-121, Section 2(b), SL 2017-57, Section 11H.17(a), and SL 2017-186, Section 4, modifying the definition of Prepaid Health Plan to also include a local management entity/managed care organization (LME/MCO) that operates or will operate a BH IDD Tailored Plan.

Requires that Medicaid services currently covered by an LME/MCO will not be covered under any capitated Physicians Health Plan (PHP) contract other than a BH IDD Tailored Plan, except that all capitated PHP contracts must cover the set of specific services, including behavioral health services, crisis services and types of substance abuse treatment. Requires that capitated PHP contracts cover all Medicaid and NC Health Choice program aid categories except for an expanded set of specific recipients, including prison inmates and those being served through the Community Alternatives Program. Also includes those with a serious mental illness, emotional disturbance, substance use disorder, intellectual/developmental disability, and those with traumatic brain injury, but provides that recipients in this category will be enrolled in a BH IDD Tailored Plan when such plans become operational. Provides these recipients with the option to voluntarily enroll with a PHP, if doing so would be the only way to gain access to behavioral health services and informed consent is provided. Sets out specific requirements for recipients who must belong to this category, including those with serious mental illness, serious emotional disturbance, traumatic brain injury, and children with complex needs, developmental delays, or involvement in the juvenile justice system. 

Increases number of capitated PHP contracts between the Division of Health Benefits and PHPs to provide coverage to Medicaid and NC Health Choice recipients statewide to four contracts. Creates exception to limit on number of capitated PHP contracts for BH IDD Tailored Plans. 

Requires LME/MCOs to cease managing Medicaid services for all Medicaid recipients other than those in subdivision (5) of this section beginning on the date that capitated contracts begin. Until BH IDD Tailored Plans become operational, LME/MCOs must continue to manage Medicaid services that are currently covered by them, and capitation payments will continue. 

Forbids Department of Health and Human Services (DHHS) from implementing BH IDD Tailored Plans until August 31, 2018, or until authorized to do so by the General Assembly.

Defines BH IDD Tailored Plans (BH IDD plans) as capitated PHP contracts that meet all requirements in this act for capitated PHP contracts except as provided. Defines Standard Benefit Plans as Capitated PHP contracts that are not BH IDD plans. Sets out terms for the implementation of BH IDD plans by DHHS as follows. If 1915(b)/(c) waivers are discontinued, the following components of those waivers must be included in the 115 waiver. Operators of BH IDD plans must provide services currently offered under 1915(b)/(c) waivers, must operate care coordination functions, and provide other functions as listed. Forbids entities other than an LME/MCO to operate a BH IDD plan for the first four years of implementation. Sets out standards for the operation of BH IDD plans and terms for their continuance after initial four-year period. 

Requires DHHS to report by June 22, 2018, with a plan for the implementation of BH IDD plans. Authorizes DHHS to take actions to implement BH IDD plans by August 31, 2018, or when authorized by a subsequent act.